What Green Tags are For

It was a New York Times article on bourgeois suburban SUVites using carbon offsets to salve their guilt that started it. Now the Conservatron conventional wisdom is that such offsets are the silly currency of preening moneybag moralists, and the Enviro conventional wisdom is that they are a facile delay to real action on global warming.

Although Green Tags are different from Carbon Offsets in nuanced but important ways, the idea behind them is generally the same; therefore, they are framed in the same way. This is a shame because Green Tags are a far more dynamic and interesting tool than either ideology bothers to acknowledge.

Carbon Offsets generally promise to balance carbon emissions via a future equal and opposite reaction. Green Tags, which to the best of my knowledge predate offsets, are an attempt to create value for “green” energy that was already produced – a value that is not reflected in the price of “green” energy.

Say a home or business establishes a solar array. For every megawatt of “green” energy produced by the array a corresponding megawatt was not produced by whatever mix of resources the local utility uses to provide energy to the building, resulting in a certain amount of greenhouse gases that were not emitted.

The Bonneville Environmental Foundation, the creator of this program, pays the owner of the array for each megawatt of power they produced, establishing a price for the green house gases that were not created by use of their array. These are the Green Tags. They are then sold, for a profit, to entities or individuals as a means to be carbon neutral. This helps to correct the market error of having no penalty for polluting the commons, and therefore, ascribing no additional value to energy sources that do not pollute the commons. This also makes small scale “green” power more profitable for the owner, increasing the incentive to invest in such products.

Companies purchasing Green Tags include some obvious suspects such as the crunchy potato chip manufacture Kettle Foods, but also surprises like mining concerns and other heavy industries. These groups probably bought them to prepare for a future where carbon is taxed.

Green Tags are about the best that can be done about global warming through the voluntary methods that the Conservatrons used to push. They will not solve Global warming on their own, but they are much more than a tool for yuppies to buy their way into environmental heaven.